Severstal Columbus Anticipates Completion of Steel Mill Expansion by Year's End

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Researched by Industrial Info Resources (Sugar Land, Texas)--Severstal Columbus LLC (Columbus, Mississippi), a wholly owned subsidiary of Severstal (LSE:SVST) (Moscow, Russia), has had the Columbus Steel Mill up and running since 2007. The $500 million Phase II expansion has been in the works for at least that long. Originally scheduled to be completed in early 2010, Phase II has seen that date pushed out time and time again. The expansion is now on track with a fully reinstated completion schedule.

The nationwide downturn in the economy saw this phase of the project slow to almost a standstill. While much of the steel industry slowed to unheard of lows, the plant was able to remain running at an average of 84% capacity. More than $900 million was spent in Phase I for this 1 million-square-foot, 1,400-acre steel mill campus. Part of the draw was the location, which has more than a dozen southern automobile assembly plants that are within 450 miles of the mill. For additional information, see June 5, 2008, article - Severstal Group Expands U.S. Holdings with Multimillion-Dollar Investments.

The purpose of Phase II is to increase in steel production, from 1.5 million to 3.4 million tons per year. New equipment will include a second electric arc furnace (EAF), a second carter, a push/pull pickling line, and a second galvanizing line. Most of the new equipment has remained on site, waiting for the project to begin again in earnest. Hiring of an estimated 100 new employees should begin during the second quarter of 2011. Severstal has given the title of "operators" to the majority of positions to be filled. The company will be looking for a number of full-time electricians and pipe-fitters. After being hired, new operators will undergo several months of on-the-job training to help become proficient in their jobs. If all goes according to plan, the expansion should be finished before the year is out.

The contractors and subcontractors number in the hundreds. CV Engineering (Pittsburg, Pennsylvania) has provided engineering skills and has served as one of the main construction companies. Tenova Core (Coraopolis, Pennsylvania) is the design-build firm behind the melt shop material-handling system. SMS, TMEIC, GE Power, ABB, Schust, Bricmont, Core and Ebner have all played important roles as additional suppliers and contractors.

Not only will the Severstal expansion be completed soon, but two new companies on campus are ready to call Columbus home. New Process Steel (Houston, Texas) and Mississippi Steel Processing LLC (Columbus, Mississippi) are ready to open their doors for business within six to 12 months.

New Process Steel has invested $15 million to build a 150,000-square-foot plant. The company is installing slitting and blanking equipment, with a 72-inch-wide capacity to process light gauge steel. Mississippi Steel Processing is starting off with an initial $15 million investment. The company's Phase I steel-processing plant includes the construction of a 72,000-square-foot Master Coil Storage area; a 44,000-square-foot processing area; and finished product storage. Also included is a 14,000-square-foot slitter processing area and 7,500 square feet of office space. Mississippi Steel Processing plans to invest an additional $10 million in a Phase II project, which will call for additional buildings and equipment that will allow them to increase product diversity.

Industrial Info has been tracking these projects since July 2006. Severstal Columbus, formally SeverCorr, was established in 2005.

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